Interest will be payable semi-annually in arrears on June 15 and December 15 of each year commencing on December 15, 2005. The Notes will mature on June 15, 2035. The Notes will contain provisions, commonly known as “collective action clauses,” regarding acceleration and voting on future amendments, modifications and waivers that differ from those applicable to certain of the Republic of El Salvador’s outstanding public external indebtedness. Under these provisions, which are described in the sections entitled “Terms and Conditions of the Notes — Events of Default” and “— Modifications, Amendments and Waivers,” the Republic of El Salvador may amend the payment provisions of the Notes and certain other terms with the consent of the holders of 75% of the aggregate amount of the outstanding Notes. Except as described herein, payments on the Notes will be made without deduction for or on account of withholding taxes imposed by the Republic of El Salvador. Application has been made to list the Notes on the Luxembourg Stock Exchange and will be made to list the Notes on the El Salvador Stock Exchange. ________________ Price: 99.474% plus accrued interest, if any, from June 10, 2005. Delivery of the Notes will be made on or about June 10, 2005. The Notes have not been and will not be registered under the Securities Act. The Notes may not be offered or sold within the United States or to U.S. persons except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A and to certain persons in offshore transactions in reliance on Regulation S. You are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The date of this Offering Circular is June 1, 2005. EL SALVADOR IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE REPUBLIC AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS OR THE RISKS INVOLVED. You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document. This Offering Circular may only be used for the purposes for which it has been published. ________________ TABLE OF CONTENTS Presentation of Information ............................................................................................................................................... iii Forward-Looking Statements............................................................................................................................................. iii Enforcement of Civil Liabilities ........................................................................................................................................ iv Exchange Rate Information ............................................................................................................................................... v Offering Circular Summary ............................................................................................................................................... 1 The Offering ...................................................................................................................................................................... 4 Use of Proceeds ................................................................................................................................................................. 6 The Republic of El Salvador.............................................................................................................................................. 7 The Salvadoran Economy.................................................................................................................................................. 12 Foreign Trade and Balance of Payments ........................................................................................................................... 25 Monetary System ............................................................................................................................................................... 36 Public Sector Finances....................................................................................................................................................... 40 Public Debt ........................................................................................................................................................................ 47 Terms and Conditions of the Notes.................................................................................................................................... 51 Subscription and Sale......................................................................................................................................................... 59 Book-Entry Settlement and Clearance............................................................................................................................... 61 Transfer Restrictions.......................................................................................................................................................... 64 Taxation............................................................................................................................................................................. 66 Validity of the Notes.......................................................................................................................................................... 68 General Information........................................................................................................................................................... 69 Because the Republic or its affiliates may purchase and resell the Notes in certain transactions exempt from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), the ability of any subsequent holder of Notes to reoffer, resell, pledge or otherwise transfer the Notes pursuant to the exemption provided by Rule 144 under the Securities Act may be limited. _______________ NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT THE EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. The Notes will be direct, general and unconditional obligations of the Republic. The Notes will, at all times, rank equally without any preference among themselves and at least pari passu with all other present and future unsecured and unsubordinated Public External Indebtedness (as defined herein) of the Republic. The Notes will be issued in registered form only. Notes sold in offshore transactions in reliance on Regulation S under the Securities Act (“Regulation S”) will be represented by a permanent global Note (which may be subdivided) in fully registered i form without interest coupons (the “Regulation S Global Note”) deposited with a custodian for, and registered in the name of a nominee of, The Depository Trust Company (“DTC”) for the respective accounts at DTC as such subscribers may direct. Notes sold in the United States to qualified institutional buyers (each a “qualified institutional buyer”) as defined in, and in reliance on, Rule 144A under the Securities Act (“Rule 144A”) will be represented by a permanent global Note (which may be subdivided) in fully registered form without interest coupons (the “Restricted Global Note” and, together with the Regulation S Global Note, the “Global Notes”) deposited with a custodian for, and registered in the name of a nominee of, DTC. Beneficial interests of DTC Participants (as defined under “Book-Entry Settlement and Clearance”) in the Global Notes will be shown on, and transfers thereof between DTC Participants will be effected only through, records maintained by DTC and its direct and indirect participants, including Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), if applicable. See “Book-Entry Settlement and Clearance.” Except as described herein, definitive Notes will not be issued in exchange for beneficial interests in the Global Notes. See “Terms and Conditions of the Notes — Form, Denomination and Title.” For restrictions on transfer applicable to the Notes, see “Transfer Restrictions” and “Subscription and Sale.” The Republic has taken reasonable care to ensure that the information contained in this Offering Circular is true and correct in all material respects and not misleading as of the date hereof, and that, to the best of the